Medtech giants raise profit forecasts on back of growing demand for products
Thermo Fisher Scientific site in Cork
Medtech giant Boston Scientific raised its full-year profit forecast on Wednesday on the back of strong demand for its heart devices, sending the company's shares up 2% in premarket trading.
Medical device makers have been benefiting from increased demand for heart procedures and non-urgent surgeries such as hip and knee replacements over the past few quarters, especially among older adults who deferred these procedures during the pandemic.
Larger rival, Abbott Laboratories raised its annual profit forecast last week driven by strong sales of its heart devices.
Massachusetts-based Boston Scientific, which has a long-standing presence in Cork spanning over 25 years, also makes equipment for diagnosing and treating a range of gastrointestinal and pulmonary conditions.
Last year, the company announced it would create 400 new jobs in Clonmel, adding that it planned to invest €80m in the expansion of its manufacturing and research and development (R&D) capabilities at its site in the Co Tipperary town.
The company now expects 2024 adjusted earnings per share in the range of $2.38 to $2.42, compared with its previous forecast range of $2.29 to $2.34 per share.
Meanwhile, pharma giant Thermo Fisher raised its annual profit outlook and posted a better-than-expected second-quarter profit on Wednesday, banking on improved demand for its tools and services used in clinical trials.
Yet, shares of the medical equipment maker fell 3% in premarket trading as the raised forecast came in below analysts' expectations.
Contract drug manufacturers witnessed a cutback on spending by their biotech clients in 2023 amid rising interest rates.
The forecast raise from Thermo comes a day after rival Danaher said that it witnessed "positive momentum" for its products and services used to develop biological drugs.
However, it reaffirmed that core revenue is expected to be down low-single digits this year.
Thermo Fisher now expects annual profit in a range of $21.29 to $22.07 per share, compared with a previous forecast of $21.14 to $22.02 per share.
The Massachusetts-based company, which established itself in Cork following its purchase of a site facility from GlaxoSmithKline for €90m in 2019, saw sales in its laboratory and biopharma services segment reach $5.76bn (€5.3bn), above analysts' expectations of $5.48bn (€5.05bn).
Revenue from that segment makes up more than half of Thermo Fisher’s total sales, which were $10.54bn (€9.72bn) for the quarter, slightly beating estimates of $10.51bn.
Latest figures from the Central Statistics Office (CSO) showed the total value of Irish goods exports reached €91bn from January to May — up 10% on the same period in 2023.
The increase was driven by output in the pharmaceutical and medical product sector which has been somewhat volatile since its outperformance during the pandemic.
Ireland’s growth outlook significantly deteriorated this year as a hangover from weak pharma exports in 2023 continued to weigh on the economy, however, the industry has bounced back slightly with exports of medical and pharmaceutical products increasing by 21% to €7.8bn in May compared with the same period last year, representing 44% of total exports.
Additional reporting from Reuters.
A collection of the latest business articles and business analysis from Cork.
